At December 31, 2011, Ihrke Imports reported this information on its balance sheet.

Instructions

(a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Omit cost of goods sold entries.)

(b) Enter the January 1, 2012, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T accounts), and determine the balances.

(c) Prepare the journal entry to record bad debts expense for 2012, assuming that aging the accounts receivable indicates that estimated bad debts are $46,000.

(d) Compute the receivables turnover ratio and average collection period.

Transcribed Image Text:

Accounts receivable Less: Allowance for doubtful accounts $600,000 37,000